Representatives of Shiite cleric Muqtada al-Sadr and Iraqi Prime Minister Nouri al-Maliki's political parties meet in Baghdad, Friday. The powerful Shiite cleric backed Iraq's prime minister to retain power Friday, in a move that could speed an end to the country's seven-month political impasse and could also hand al-Sadr's bloc considerable influence in the next government.

The reversal by Mr. Sadr's bloc – which until recently had strongly opposed returning Maliki to power – leaves Maliki just shy of a parliamentary majority and figures to end nearly seven months of political deadlock that the US military has blamed for a recent uptick in insurgent attacks.

While Obama administration officials have been pushing Iraqi political leaders to end the stalemate, and have privately said that a Maliki victory would help bring about a peaceful transfer of power, the critical role played by Sadr brings a decidedly mixed outcome for Washington. Sadr's followers waged some of the most brutal attacks against US forces during the Iraqi civil war and have close ties to Iran.

Maliki four seats shy of parliamentary majority

Maliki, whose mostly Shiite State of Law party finished a close second in the March elections with 89 parliamentary seats, would control an additional 70 seats with the support of the other Shiite parties, of which Sadr's is the largest. That would leave Maliki four seats shy of the 163-seat majority needed to form a government.

That support is likely to come from the Kurdish political bloc, which won 43 seats, and now is poised to play the role of kingmaker. Experts say Kurdish leaders will put pressure on Maliki to speed up the resolution of the disputed oil-rich city of Kirkuk, which Kurds believe is rightfully theirs.

Mohsin Sadoon, a member of the Kurdish coalition, called the decision "a great and important step" and said that talks with the Maliki alliance would proceed quickly.

"It was the issue that delayed the formation of the government for a long time," Sadoon said. "We will start the negotiations of forming the government with the alliance by presenting our demands and political projects very soon."

Final blow for Allawi's coalition?

While a Maliki victory had seemed a likely outcome, the announcement appeared to be the death blow to the secular Iraqiya coalition led by former Shiite prime minister Iyad Allawi. Allawi's bloc won 91 parliamentary seats, a narrow plurality, but couldn't gain the backing of the Shiite parties.

Much dealmaking remains to be done, however, and not even all Shiite parties were pleased with the bloc's decision, signaling that the 70-seat bloc could erode slightly. Two prominent groups – the Fadhila party and the Supreme Islamic Iraqi Council, including Maliki's chief rival, vice president Adel Abdul-Mahdi – skipped Friday's meeting.

Observers said that the opposition to Maliki could lead minority Sunnis and some leading Shiites to boycott a Maliki-led government, making it difficult for him to form a cabinet.

"We were hoping to reach an accord by clear procedures and criteria," Basim Sherif, a prominent Fadhila member, told al Jazeera. "But what happened today was bilateral agreements according to interests…. So we walked out of the meeting."

US calls for rival groups to be included

US officials called on Maliki's coalition to continue negotiations and bring rival groups into the government.

"We believe all four winning blocs must play a role in the coalition government, including Iraqiya and the Kurdistan Alliance," said a spokesman for the US Embassy in Baghdad, David J. Ranz.

Memories of the March election, which observers hailed as peaceful and transparent, quickly melted over a long, hot summer during which Iraqis cursed their political elites for dithering and collecting large salaries while ordinary citizens suffered through power outages, shortages of basic services, and ongoing violence.

The instability worsened in September, following the end of the Muslim holy month of Ramadan, with an upsurge in rocket and mortar attacks, many of them aimed at the Green Zone, the heavily fortified area of Baghdad that houses the U.S. Embassy and Iraqi government buildings. The US military counted 21 so-called indirect fire attacks in the 30 days ending Sept. 29, compared with 13 in the previous 30 days.

US military commanders said that both Sunni and Shiite insurgent groups were using the political stalemate as an excuse for violence.

"I think you could make an argument that once this government forms, you'll see the level of violence that's been occurring over the last couple of months wane," Brig. Gen. Ralph Baker, commander of US military forces in Baghdad, said earlier this week. "There'll be less of a perception that there's an opportunity that exists to drive a wedge in between."